Summary Statement
from
Waterford Institute of Technology (WIT)
to the
Public Accounts Committee (PAC), 6 April 2017
I welcome the opportunity to address the Committee on behalf of the Institute and to
address matters relating to the Institute’s accounts. I wish to begin by setting my remarks
in context.
The Institute’s current situation needs to be considered in the context, first of all, of
demonstrable under-investment in the third-level sector over a decade and more and,
moreover, inequities in the ways funding is distributed between Institutes of Technology
and Universities. Some aspects of this are outlined in our briefing document but, in
summary, between 2008 and 2015 State investment in the IOT sector in general dropped
by 50% while student numbers increased by 30%.
As we say in our briefing, our mission is to serve our students, the citizens and
communities of the South-East, and our social, industrial, cultural and commercial
partners and stakeholders - regional, national and international. Since its foundation in
1970, the Institute has responded proactively to the region’s needs and with huge success,
evolving from a provider of vocational training programmes to a research-led,
internationally respected educational institution.
Over the last 10 years the Institute has successfully attracted over €135m in competitivesourced research funding from various sources. We have been instrumental in attracting
knowledge-intensive industries to the South East region and WIT has been vital to job
creation and regional development. Since 2008 WIT has signed 34 licences and been
involved in the spin out of 10 companies resulting in the creation of more than 600 high
impact jobs in Waterford. (The statement by Enterprise Ireland to the Public Accounts
Committee on the 31st January 2013 stated that “Waterford is a shining example of how
co-locating the incubation centre with the institute has led to the establishment of a
software industry that probably should not have existed in Waterford.”).
The Institute has played a pivotal role in the transformation of Waterford as a leading
high impact digital and advanced manufacturing economy. A key example of this is
FeedHenry which created 50 jobs. Redhat recently announced an investment of €12.7m
in a new project which will create an additional 60 jobs, going some way to address the
unemployment deficit in the City.
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At the same time, the Institute’s record in promoting regional access and participation is
also extremely strong. Approximately half of our undergraduate intake is from sources
other than the leaving certificate student cohort. Over one third of our full-time learners
come from target socio-economic groups, approximately 10% of our students are
registered with our disability office and almost 3,400 students at the Institute (over 40%)
are currently receiving some form of grant funding.
WIT’s current situation must be set in the context of these efforts to address regional
need while at the same time bearing catastrophic funding cuts. The success we have had
over many years in the Research domain (required to encourage and enable regional
development) and in Access (required to give opportunities to our citizens), to give just
two examples, has come about because of the hard work of our management and staff
who have pursued these activities despite the restrictions within which they have worked.
I turn now to addressing the items specifically referred to in the Committee’s
correspondence with me.
In relation to the Institute’s 2013/14 financial statements, the delay was, firstly, as a
result of the Institute complying with a request from the Comptroller & Auditor General
to carry out a substantial policy change which required a full review of research income
and a change in the policy relating to the recognition of research overheads; a change
that was requested across all third level institutions. Secondly, 2013/14 was the first year
the Institute was required to consolidate the financial activities of the subsidiary
companies which were the subject of The Quigley Report1 issued in June 2013 to the
Minister for Education and Skills.
For year ending 2013/14 the Institute’s financial statements, before consolidation, record
a surplus of €1.168m compared to a deficit in the prior year of €306k. General
expenditure in the year increased by 0.9% largely due to increases in utility costs.
However, State Recurrent Grant fell by €2.78m (9%) compared to the previous year.
Some of this decrease was offset by an increase in Student Contribution and Tuition Fees
particularly as non-EU Fees increased by €1.55m in that particular year.
Also in that financial year the subsidiary companies reported an annual financial profit of
€1.096m. The consolidation required the alignment of policies in relation to the
treatment of assets, deferred capital grants and reserves (both recurrent and capital) and
this necessitated a transfer of €26.936m from revenue reserves to capital reserves, hence
creating a deficit on consolidation; this deficit is matched by capital reserves and assets.
1
https://www.education.ie/en/Publications/Education-Reports/Report-to-Minister-for-Education-and-Skillson-the-relationship-between-Waterford-Institute-of-Technology-and-Companies-providing-Campus-Servicesto-it.pdf
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In the year prior to consolidation we moved the financial year end of the subsidiary
companies to August 31st rather than June 30th in order to bring the financial year end in
line with the Institute’s. A consequence of this approach is that comparative 12 month
figures for the year ending 31st August 2013 were not available to include in the
consolidated Income & Expenditure Account.
The overall financial position of the Institute remains difficult; funding levels have not
yet been fully restored in the Third Level sector as highlighted by the financial review
published by the HEA in October 2016. That report indicates that the future
sustainability of the IOT sector is under threat and that there is a “critical need for
investment in order for the sector to survive and flourish.” The WIT Executive is focused
on addressing matters associated with the financial situation that are within its control.
As reflected in the Higher Education Sector Systems Performance 2014-20162 the
Institute places a high degree of emphasis on good practice, corporate governance and
internal audit. The Audit Committee was reconstituted and greatly strengthened in
December 2013, following the recommendations of the Quigley Report; the detail is
included in our briefing statement. It was an administrative error that the report
mentioned in your correspondence was not furnished to the Governing Body in the year
ending 31st August 2013 within the acceptable timeframe. However, the records and
minutes held in the Institute confirm that the Governing Body were, and remain, fully
apprised of the work of the Audit Committee.
Finally, with regard to the Technological University process, WIT remains committed to
the provision of enhanced educational opportunities and an enhanced innovation and
development infrastructure for the South East. This is needed by the people of the South
East and demanded by all our stakeholders. The Technological Universities legislation
currently under consideration will enable the provision of that enhanced higher education
infrastructure. In this context, we continue to engage with IT Carlow to explore the
potential to create that new entity.
The Institutes made a successful application for funding in support of the engagement
process to the HEA and the agreed project plan for this will see the Institute complete the
Commencement and Activation phases of the process by the end of 2017. Currently an
MOU between the organisations is being finalised. The organisations have identified
members to participate on a joint steering committee to advance the process.
2
http://www.hea.ie/sites/default/files/higher-education-system-performance-2nd-report-20142016_0.pdf
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